He said the business took money from customers through an intermediary company called Flo 2 Cash.<\/p>\n
It used these funds to fulfil previous customer orders in what Patel said was a \u201cPonzi operation model\u201d.<\/p>\n
Tech Vault Enterprises was incorporated in April 2020.<\/p>\n
Rahil Munir Tharani of Hamilton is listed as the sole shareholder and director.<\/p>\n
\u201cI\u2019m not good at the moment,\u201d Tharani told the Herald today. \u201cI\u2019m not right with my health.\u201d<\/p>\n
He added: \u201cI don\u2019t know about Flo 2 Cash. They\u2019re a different entity.\u201d<\/p>\n
Patel said Tharani was \u201cfully co-operating\u201d with the liquidation.<\/p>\n
\u201cI\u2019m the one who\u2019s copping it right now in terms of people calling me up.\u201d<\/p>\n
Patel said a call centre was used to approach vulnerable people across the country.<\/p>\n
He said one of Tech Vault\u2019s customers was an elderly woman with dementia.<\/p>\n
\u201cThe lady said \u2018I don\u2019t understand anything, why do you keep pushing it?\u2019\u201d<\/p>\n
He added: \u201cIt\u2019s white-collar theft. There are 51 customers. They\u2019re from Invercargill right up north.\u201d<\/p>\n
Patel said Tech Vault hardly ever carried any stock.<\/p>\n
It would take money from customers, then go to an appliance shop and buy goods for previous customers.<\/p>\n
\u201cWe\u2019ve seized their storage unit in Hamilton but National Storage won\u2019t give us access because they\u2019re owed rent.\u201d<\/p>\n
The 51 customers were owed $38,865.50.<\/p>\n
\u201cThere\u2019s quite a bit owing to IRD [Inland Revenue Department]. Unfortunately, that means that those customers who\u2019ve paid that now become unsecured creditors,\u201d Patel said.<\/p>\n
Pritesh Patel is the liquidator.<\/p>\n
The company was placed into liquidation on January 30 and Patel issued his first liquidator\u2019s report yesterday.<\/p>\n
\u201cThe business was in effect sliding backwards\u201d by taking money through customers via Flo 2 Cash, he wrote.<\/p>\n
It used these funds to fulfil previous customer orders.<\/p>\n
He added: \u201cIt had inadequate systems in place to have a good financial control on deposits coming in and payments going out.\u201d<\/p>\n
Patel said the Commerce Commission investigation and subsequent newspaper articles caused the business to have diminished goodwill and a reduction in customers.<\/p>\n
The liquidator had written to all creditors to immediately stop payments to Flo 2 Cash.<\/p>\n
Unconscionable conduct<\/p>\n
This is one of the first two Commerce Commission cases for alleged unconscionable conduct.<\/p>\n
Patel said Tech Vault Enterprises had pleaded guilty at the first available opportunity.<\/p>\n
The company was fined $60,000 at the Hamilton District Court and ordered to pay emotional harm reparation of $7500.<\/p>\n
Patel sent a letter seeking the release of about $15,000 from Flo 2 Cash, who acted as intermediaries to collect deposits.<\/p>\n
He said he had not heard back.<\/p>\n
The Commerce Commission previously said it investigated Tech Vault, trading as HouseSmile, in relation to its compliance with the Fair Trading Act.<\/p>\n
It said HouseSmile pleaded guilty to a breach of section 7, a prohibition against unconscionable conduct.<\/p>\n
The commission has also filed proceedings against Brand Developers Limited, trading as The TV Shop<\/a>. <\/p>\n